tv Bloomberg Markets European Close Bloomberg September 12, 2017 11:00am-12:00pm EDT
vonnie:i am vonnie quinn, this is the european close on bloomberg markets. top stories we are covering from the bloomberg and around the world, some of the top investors have gathered at the summit in zurich. ways todiscuss the best position your portfolio. president trump is set to the road to make a pitch on tax reform. specific this without deals of the plan? apple is just hours away from unveiling its new flagship phone , as well as other products. we will take you live to california as the starts to
build. -- buzz starts to build. we are minutes from the end of the tuesday session. longest winning streak since april for the european benchmark. tech stocks are the big gainers today ahead of apples unveil her of its big iphone. it could get a share of components manufacturing. there is any positive catalyst. we are witnessing the record high once again for the world index. let's look at the currencies. the most interesting currency today with day -- today is sterling. it is rising today. u.k. inflation raised higher than forecast today. the last your was 2.6% did it
sets up boe meeting on thursday. there is a one in three chance the markets hold a rate hike by the end of the year. ande got average earnings unemployment figures tomorrow. it's going to be a fascinating week ahead of that central-bank meeting. this is what is happening as you can see, money moving into equities and the pound. all yields are rising prices are lower. there is an appetite for risk across europe today. julie, how's it looking over their? the dow and the s&p are hanging on. the rep nasdaq -- nasdaq dipped quickly into the red. we definitely see some high levels for the major avenues.
you talked about the anticipation around apple. the shares are down .3%. earlier .5% it's not unusual to have negative training because there is so much expectation built into the event. mcdonald's shares are declining. there are concerns about it six does your in texas and florida. they have more than 2000 locations combined in those two states. is looking at trends and as a result of the storms come it is going to miss estimates for domestic revenue and same-store sales. the company was downgraded over at morgan stanley out of concern of the margin growth. those shares are down 2.5% even as we see stocks near new highs,
it's not spread among everyone. take a look at the bloomberg trade this is the will -- bloomberg. this is the most heavily weighted share. there is a ratio of it on the bottom. the s&p 500 have been outperforming index consistently this year. that means these big stocks have been doing better than the smaller weighted stocks. as you look at some of the gains we see today, dow dupont is one of those. shares are up 2%. they are shifting the makeup of the company with plans to spin off. that gaspists like shares are up. -- that. gas shares are up. it is worth more than the total company enterprise value. cap has more details about the divisions and revenues. joanathan: let's get back to the
did i am joined by the nato secretary general and former prime minister of denmark. thank you for joining us. russia is conducting wargames. it is the biggest in four years. putin testing the resolve of the nato alliance? >> i think he is testing the resolve of the western alliances in general. is aor concern of course lack of transparency. i think he should demonstrate a willingness to let observers see what is going on so we can how big the exercise really is. mark: the other big issue is president trump. his initial comments today, he
has embraced the idea of nato more. is he committed? to the alliance? or not? anders: i was concerned about candidate trump and his statements about nato as an obsolete organization. after he took office and after he appointed a very.'s security team, i think we can trust that the americans will feel committed to the famous article 5. mark: is it clear, his pledge to back the nato which will defense clause? anders: if you see the actual american acts in eastern europe, you will see that they are still committed, they have taken the our in strengthening
territorial defense in the east. mark: does he have the credibility of nato in the last 18 months? anders: i think he missed a good opportunity when he visited nato had orders to really demonstrate clear commitment to nato. facts on the ground, the fact are very clear. -- facts are very clear. the americans are committed to -- committed. mark: this leads to the 2% pledge. is there compromise? can a compromise be reached between its members that satisfies president trump? reach: the compromise to 2024, we0 or, -- decided that.
even in germany, even in an election campaign in germany where it is a sensitive issue, angela merkel has stayed committed to her pledge. all europeans will do the same. they have already used defense investments and they will continue to do so. mark: angela merkel has included peacekeeping. she's got her own way of regulating out -- wiggling out to avoid criticism. is there wiggle room or not? anders: there is. after the elections in germany, see a new german approach. germany has a real economic strength. that will be followed in the coming years by a stronger political and military leadership are you we need that. -- leadership.
we need that. betweene is the head moscow and the in a state? -- united states? would be a clear demonstration to vladimir putin and president trump that europeans and in particular the germans are committed what we ,all the liberal world order which also implies western leadership of the world order. mark: germany is having a feud with turkey right now. how serious is the trouble with turkey and nato best mark -- nato western mark -- nato? aners: turkey has made agreement with russia. mark: what is your reaction to that? buying these missile defenses?
anders: i think nato should a clear to turkey that obviously the russian what is not compatible with nato equipment. move into decided to the sidelines. anders: what is the significance of -- mark: what is the significance of germany moving troops out of turkey? anders: that is the other side of the same problem. say ae seen and i would warning development when it comes to democracy and respect for human rights and minorities and rule of law, the germans have had to react. mark: will others follow suit? anders: i don't know.
it is a possibility. political --nly a military alliance, it is a political alliance a stone values. reckless behavior of north korea is a global threat. that includes nato. how do you see a response right now given sanctions don't seem to stop the regime from provoking the last -- west? anders: i have to say directly that there are only bad military solution. -- solutions. we should we can to find the nomadic solutions. china is the only nation on the earth that could put sufficient pressure on tim john kuhn. -- tim john kuhn.
jung un. mark: what if they just fired a m?ssile on walmart -- gua anders: you cannot say in advance it would be. case, they in that nato council would have to meet decided this would trigger article 5. mark: i wish we had an hour. thank you for joining us. is the former prime minister of denmark. where are the ultra rich investing western mark -- investing? that is fantastic. let's come back to new york and get the first word news.
courtney: federal officials are one that the southeastern u.s. could face fuel shortages because of the hurricanes. the government has given a waiver of restrictions on warned ships to distribute fuel. returning totarted the upper florida keys. the region is still lacking water and our for the most part did more than 12 you people in florida do not have electricity. north korea is blasting the u.s. for the latest sanctions imposed by the security council. he calls it illegal and unlawful. they are part of what he calls the u.s. evil intentions. the u.s. had to water down the sanctions to get russia and china on board, neither would support an oil embargo. president trump will visit china. the chinese president invited after trump -- mr. trump.
heatedly called on china to stop north korea's nuclear dance but and said it could easily and the crisis. truck drivers in paris stage a protest the yen's backgrounds -- against mccrone. 180 demonstrations were planned cross france. this would reduce the power of the unions and companies more authority to fire workers. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. thanks. ising up, donald trump planning a roadshow to sell his tax overhaul plan. we have details. bloomberg. -- this is bloomberg. ♪
vonnie: i am vonnie quinn along with mark barton. he is in zurich today. this is the european close. he is planningys an aggressive travel schedule over the next few months, covering 13 states to sell tax reform. he will visit china in november. kevin joins us from the white house. that, he is going to face places where there are seats in play. is this a campaign schedule western mark -- schedule?
kevin: absolutely. he is in the zone where he can be effective. that is taking the message to the battleground states and to his core group of supporters. still lookingis to capitalize on some of that goodwill from the bipartisan deal with democrats. he will have dinner with a handful of top democratic centrist, people like joe manchin. vonnie: what is the potential for him to re-energize his base and have some of them relative to what it was? kevin: i think where his support lies is with that coalition he was able to assemble during the camp ain't. -- campaign.
there are some rumblings of a are trying to make sure that support is still there, especially as they head into 2018. this is a white house that is hungry to have some type of policy initiative win. that's why you see the president vocus on tax reform and why we see him meet with democrats. the president is saying that if people in his own party won't work with them, and there are better chances across i'll -- i'll -- aisle. vonnie: maybe 15% isn't a doable or print tax rate? kevin: that is their opening did. that is the rate they would like to see, that is the marker they have laid down. publicly, they will say that what they want it -- want. it is potentially just an
opening bid. you are also going to hear a lot about intentionally removing some of the popular tax cuts that have been institutionalized. designed as a bargaining chip in order to win over some of those key centrist democrats. some of the ultraconservatives are not able to get on board. i think it was an interesting signal sent last week, that they are willing to look beyond republican leadership. we've been saying for weeks now that the illustration want to correct course on policy. kevin is joining us from the white house. a reminder that later today we will have special coverage of apple's new product event. it happens at 1:00 eastern time.
mark: i am mark barton in zurich. the european close is just a few minutes away. bmw will sell 100,000 electric cars year. that is according to their sales chief. matt miller start -- talked to him. dayets four years to the that we unveiled the car here in frankfurt. we have nine electric models on the market. we are going to the 100,000 vehicles this year. thisve hybrids like concept x7. this is a long-term trend. it's going to get stronger.
: will you be able to meet your co2 emissions? >> we are going to do 100,000 in one year, the momentum is there. investment,ue the the scaling effect as part of the long-term strategy. : margins are the dream of the industry here in -- industry. are you going to be able to the fat high with electric cars? carsat high with electric coming into the mix? big push into what we call the larger cars. you will see an 8 series. the mix of products is going to shift and that gives us more opportunity. 10% is the steering guidance.
matt: i would want a big diesel engine in it. am i the last of a breed? >> diesel is still an important part of the combustion engine mix. in parts of asia, was will see strong demand. you will see diesels and the very cleanest diesels in the years to come. i believe we will see that situation. people are beginning to understand the there are new very clean diesels. diesel fuel has a long way to go. vonnie: ian robertson is the special representative. let's look at the against business stories right now. investors have been waiting for goldman sachs to turn around its trading operation. they are going to have to wait longer. we spoke to the goldman co-ceo
harvey schwartz earlier. markett of the conditions have continued into the third quarter. the fund is performing well. vonnie: the turnaround plan has involved cutting senior staff and risk rated assets. shares are falling by the most in a year. they are afraid that the storms in florida and texas will hurt sales. mcdonald's has 2000 locations in those two states alone. coming up, where the ultrarich are invest in. we are -- investing. we are going back to zurich. this is bloomberg. ♪
session higher for the fifth consecutive day. tech stocks are rising ahead of the apple event. there is an appetite for risk. that is the big story. sterling is up on the back of inflation data. did itor figure was 2.6% makes the bank of england committee meeting all the more exciting. a third ad to the list western mark there is a one in three chance that the bank of england will raise rates. -- core inflation, sterling has a high against the dollar. just to prove the fact that there is an appetite for riskier
assets and less appeal for defensive assets, but if these bond yields. you can see yields rising across the spectrum. the ecb held rates steady. it stands ready to extend its monetary stimulus program if needed. these are some insights into the risks. i enjoyed reading your report earlier. the line that stood out to me, i look at your chart. favor anystrongly assets. there was an emptiness. that tell us everything we need to know about markets? i think it's about valuation. >> the returns are not particularly attractive.
unless we things are very positive for those two reasons. the chairman of ubs told me there are a couple of years to run. he did not go that far. two more years? >> i see double-digit gains from here. rate in theinterest united states, we think we have quantitative manacles -- manageable's. valuations are full and not overly stretched. what -- where are valuations most stretched? what is top of the board? about european high
yields, which you could struggle to home -- call high-yield. i worry about u.s. equities and where we are tech level. from you pull back about technology? >> apple is not most expensive. there is a lot of exuberance. mark: you still favor the asset class? >> we do. we been taking money off the table and -- table. mark: central bank leadership, yellen could lead in february. sick draghi, you are testing in your note -- suggesting in your note, he could make a run for the italian leadership. >> it comes back to what we are trying to do. inflation does not need a lid
cap donna reed whoever comes in is going to have -- cap on it. -- kept on it. mark: does it need new leadership? >> i'm not sure. i don't know that mario draghi is going to come in and do anything different. mark: this is everywhere. >> the develop world is very indebted. you could raise interest rates. mark: do you worry about the long unwinding of qe? could the rollback be such an and can he needs to central banks the way keep it indefinitely off balance sheets? as i said, the developed world is very indebted. 20%ral banks are in between
and 40% of bond markets. one of the ways you get around the issue of how we pay off his debt is by not paying the bit of the debt you of two central banks. if you forgive the yield, it would be debt. mark: another problem is the dollar and if it reverses course. does it reverse course western mark -- course? have they put their houses in order and not for us to not worry about the dollar reversing course? >> i'm not true they could withstand completely. we would not expect that. the u.s. economy has big deficits. we don't think interest rates are going to be raised aggressively in the states. we don't and is a backdrop for
that area -- that. the dollar is at about the right price. i think it will be volatile the current level. oil manageable for the company? >> in south africa? i think south africa is vulnerable politically and from an economic standpoint. there are more attractive places the emerging markets. those with the exposure to china, we think that looks ok. think they are firmer than some of the other emerging markets. mark: what's going to prompt major tweaks? >> if we had a market movement we were not or casting, where we
have our money positioned is the right place to be. mark: favorite asset? >> japanese commodities look attractive. you've got a very positive monetary policy. they are beginning to focus on the terms and returns for the shareholder. all of those things, you got a growing global economy. those are good reasons. mark: it's like the pound. >> that's a good thing. the rise of inflation today is the result of the all in sterling and we are going to see real incomes. we've got the brexit uncertainty. we've got an indebted consumer. there are reasons to avoid sterling. i think you can avoid sterling. mark: it's great to see you.
vonnie: that's great stuff there once again. let's check in with courtney. courtney: people chased away by the hurricane are being returned the florida keys. they have been allowed back to some of the upper islands of the chain. the highway to the lower keys has been washed out. power and water has cut off in all three hospitals are closed. an aircraft carrier is helping with search and rescue. the trump administration will change policy on self driving cars are in -- cars. they will drop a proposal that considered new power to police safety. norway, the first conservative party leader to win reelection in more than 30
years. she spent a record amount to avoid recession. she will still have to warm a coalition government. in the u.k., inflation grew more than expected. it increased at 2.9%. there was the biggest rise in loving prices in three decades. the bank of england is dealing --h its 2% target area target. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. i am courtney donahoe. vonnie: thank you. rattled i uncertainty, we will tell you what high net worth individuals are putting their money in. later today, the founder and chairman of the hedge fund omega advisory study.
vonnie: from new york, i am vonnie quinn along with mark barton in zurich did -- zurich. shareholders have voted to reject an increase stake from warren buffett. shares of home capital have halted. julie: this is a troubled canadian mortgage lender. it was accused by the loveland of the fcc in canada of fraudulent mortgages. the stock plunged at the time.
they were facing a run on deposits. they falsified applications. incomes warren buffett and berkshire hathaway, buying a stake in the company of 20%. the agreement was he would do this in two waves. he would buy the 20% stake. was buying the shares at a discount. then shareholders would have to avoid the second crunch in which he would used his stake to 38%. the stockholders asked that management not do that. they said it would dilute the socked by selling the shares to berkshire. they would be at a discount. at this point, they are saying thanks, but no thanks. they already got the buffet boost. it looks like he is made 40% on his initial investment.
the second round he was supposed to buy at a discounted price. $9.55 andht them at $13.92, he said this could go either way. he said we would like to buy the stock if the shareholders voted down, we will be fine. mark: can say that again. vonnie: we will bring you the shares when the -- news when the shares start to trade. mark: a new report by ubs shows the wealthiest families are heading the stock market boom has room to run or it -- run. joining us is the ubs head of ultrahigh net worth. thank you for joining us. what is the mood like? they have increased their assets in private equity. clientsour clients --
own 30% of assets in what we call bankable's. optimisticite despite some of the geopolitics. mark: is that a big concern? what is there top two worries right now? >> i think geopolitics. that is where the biggest growth is, southeast asia. there is a massive military buildup in the south china sea. thee is crossing through south china sea. north korea could affect the trade flow. it could be a black swan in the coming. mark: cash holdings are still high? >> it has dropped this year from
last year, but it is still high. , two thirds of their assets are in risks. they want to have a's civic allocation to cash to be protected. specific allocation to cash the protected. tok: this is relatively low ubs. is that correct? what are you doing to prove that? >> our market share is 10%. what we do is we offer multicurrency, multi-looking opportunities. we are really good at the cross divisional. increaset you doing to
that percentage? >> we are where the growth is worried we have 13 locations globally. we are in hong kong, singapore, tokyo, u.k., 10 locations in europe did -- europe. we are in the united states and middle east. american and asian civic family offices -- civic offices areacific committed to growth. others have a more balanced approach. how would you account that? >> that is true. americans are more exposed to private equity and to hedge funds. offices run large real estate portfolios. america, you have more
generational money that is balanced and less one-dimensional. mark: has the move into real estate by high net worth individuals, as it work out? -- has it worked out western out western mark -- out? we have seen significant increases in value in return. mark: do you think the allocation to please -- equities will rise this year? is that sensible giving valuations and it we are at new highs today? >> i was at the session and the baseballwas act -- in terms. the consistent -- consensus was
between x point i and seven. -- 6.5 and seven. interests are relatively low. which trigger should make the stock market slow right now? it's nonobvious. months or twor 18 years. the trigger could be short-term geopolitics. sign from the fed it to increase rates. year, the return was 7%. on the flipside, real estate and hedge funds worse of do. reducingamily offices their exposure to had funds -- hedge funds?
>> they underperformed on average more than others. family offices are under pressure to review the hedge fund exposure because of pricing considerations. what we have seen is the reduction, especially in asia. billionaires? billionaires globally. toare not lending corporate's. we are lending to individuals. individuals are usually very savvy when it comes to make sure they pay their debts. mark: thank you very much. bonnie -- vonnie: once again, fantastic stuff.
vonnie: this is the european close on bloomberg markets. mark barton is in zurich. biggest product launch in years is taking place in just about an hour. it will take lace in the steve jobs theater. they will launch three new iphone models. one of them is a premium model that is six acted to cost $1000. it will include three racial recognition, cameras, augmented reality apps, and a virtual home
as well. the new applefrom complex. i want to ask you about the campus. what it like? i was just in there. i just came from there a few minutes ago. it's extraordinary. it's class, there is an escalator that was as it -- twists as it goes down. i saw a steve wozniak in there. architect ofginal the mac software that came with the iphone. this is a very exciting event. they are commemorating the 10th anniversary of the iphone, one of the most important consumer product of all time.
mark: i've got three words for you, price and release date. but you think? iphone 8 will come in at the same price points atthe iphone 7, starting $650. it depends on the color and capacity. at iphone x will come in $1000. these are full prices before installment plans are it -- plans to -- plans. vonnie: we know about rumors. what are people saying might actually be the while back -- gasp factor. it, think how they frame
whatever tribute they have two steve jobs. the apple watch will be significant. we are expecting a new remote control for the fake -- four k apple tv. i think it still going to be exciting for consumers and investors. vonnie: he is reporting from cupertino. thank you. our coverage begins at 1:00 eastern time. i am vonnie quinn in new york where it mark barton is in zurich all day. this is bloomberg markets. ♪
from bloomberg world headquarters in new york, these are the top stories on the bloomberg we are following. breathed a sigh of relief following irma. for more calling caution. we will head to florida to get the latest on the recovery efforts. we will talk to the mayor of naples. unveils gearing up to three new smartphones. we will head to the new campus in cupertino. all that is up in the next 60 minutes. we have julie hyman with us. we are halfway into the trading day. julie: it doesn't take much.